JPMorgan Analysts Say Bitcoin Crash May Have Been Driven by Crypto-Native Perpetual Futures Deleveraging, Not ETF Investors

• Perpetual futures forced a large deleveraging wave, shrinking open interest by ~40% in dollar terms.

• Spot Bitcoin ETFs recorded modest outflows (~$220 million; 0.14% of AUM) and Ethereum ETFs ~ $370 million (1.23% of AUM).

• Coinglass recorded more than $20 billion in long liquidations from over 1.5 million traders at the peak of the selloff.

Crypto market crash concentrated in perpetual futures; JPMorgan and Coinglass data show leveraged traders bore the brunt—read analysis and next steps from COINOTAG.

By COINOTAG — Published October 17, 2025 | Updated October 17, 2025

What caused the crypto market crash?

Crypto market crash dynamics point to a rapid deleveraging among crypto-native traders, especially in perpetual futures, rather than broad-based selling by ETFs or institutional CME participants. JPMorgan analysts led by Nikolaos Panigirtzoglou report that perpetual open interest fell sharply, triggering cascading liquidations and amplifying price declines.

How did perpetual futures amplify the selloff?

Perpetual futures permit continuous leveraged exposure and are widely used on offshore, unregulated venues. Open interest in Bitcoin and Ethereum perpetuals declined by roughly 40% in dollar terms, exceeding the spot decline and indicating forced unwindings. JPMorgan’s note states, “evidence suggests a significant deleveraging event is underway within perpetual futures.” Coinglass data recorded more than $20 billion in long liquidations from over 1.5 million traders during the most intense phase, making it the largest single liquidation event on record.

Frequently Asked Questions

Did institutional investors trigger the October crypto crash?

No. Data show limited panic among regulated institutional channels. Spot Bitcoin ETFs saw about $220 million in outflows (0.14% of AUM) and Ethereum ETFs around $370 million (1.23% of AUM), while CME Bitcoin futures experienced minimal liquidations. JPMorgan interprets these figures as evidence that long-term ETF holders stayed largely steady.

Why did liquidations spike so dramatically last week?

Liquidations surged because leveraged positions in perpetual futures were forced to close as prices fell. A rapid drop in open interest—about 40% in dollar terms—meant margin calls and automated liquidations accelerated selling. Geopolitical news and elevated volatility likely acted as triggers, prompting momentum-driven traders to reduce risk.

Key Takeaways

• Primary driver: Perpetual-futures deleveraging on offshore platforms triggered the largest liquidation event on record, per Coinglass.
• ETF resilience: Spot Bitcoin and Ethereum ETFs showed modest net outflows, suggesting longer-term holders and institutional ETF investors did not engage in mass selling.
• Market structure risk: High leverage and momentum strategies remain principal sources of volatility; monitoring open interest and exchange-level leverage is essential for risk assessment.

Conclusion

The recent crypto market crash appears concentrated among leveraged, crypto-native participants using perpetual futures, rather than being driven by spot ETFs or regulated institutional trading. JPMorgan analysis and Coinglass liquidation tallies indicate that speculators on offshore venues absorbed most losses, while ETF flows remained comparatively stable. Market participants should monitor perpetual-futures open interest, ETF flows, and on-chain custody data to gauge future volatility. For ongoing coverage and data-driven updates, follow COINOTAG’s reporting and dashboards.

Sources: JPMorgan research note led by Nikolaos Panigirtzoglou; Coinglass liquidation data; CME futures volume and custody flow observations reported by industry data providers (sources cited as plain text).